Correlation Between Commonwealth Bank and Nine Entertainment
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank and Nine Entertainment at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Commonwealth Bank and Nine Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Bank of and Nine Entertainment Co, you can compare the effects of market volatilities on Commonwealth Bank and Nine Entertainment and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Commonwealth Bank with a short position of Nine Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Nine Entertainment.
Diversification Opportunities for Commonwealth Bank and Nine Entertainment
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Commonwealth and Nine is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and Nine Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Entertainment and Commonwealth Bank is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Commonwealth Bank of are associated (or correlated) with Nine Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nine Entertainment has no effect on the direction of Commonwealth Bank i.e., Commonwealth Bank and Nine Entertainment go up and down completely randomly.
Pair Corralation between Commonwealth Bank and Nine Entertainment
Assuming the 90 days trading horizon Commonwealth Bank of is expected to generate 0.12 times more return on investment than Nine Entertainment. However, Commonwealth Bank of is 8.58 times less risky than Nine Entertainment. It trades about 0.09 of its potential returns per unit of risk. Nine Entertainment Co is currently generating about -0.03 per unit of risk. If you would invest 10,025 in Commonwealth Bank of on September 3, 2024 and sell it today you would earn a total of 250.00 from holding Commonwealth Bank of or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Bank of vs. Nine Entertainment Co
Performance |
| Timeline |
| Commonwealth Bank |
| Nine Entertainment |
Commonwealth Bank and Nine Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and Nine Entertainment
The main advantage of trading using opposite Commonwealth Bank and Nine Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank position performs unexpectedly, Nine Entertainment can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nine Entertainment will offset losses from the drop in Nine Entertainment's long position.| Commonwealth Bank vs. Ras Technology Holdings | Commonwealth Bank vs. Alto Metals | Commonwealth Bank vs. Green Technology Metals | Commonwealth Bank vs. Collins Foods |
| Nine Entertainment vs. Encounter Resources | Nine Entertainment vs. Tlou Energy | Nine Entertainment vs. Superior Resources | Nine Entertainment vs. Peel Mining |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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